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  2. This is not a final reg
  3. Thank you! This is what I did with the DPAD in previous years so it made sense to follow the same method. Thanks again EricF.

    Form 1041

    Decedents would get the step up in basis under the 1.1014-4 uniformity of basis rules. Looks like you have two choices, report by estate and k-1 sons, or report on 1041 and back out since the property actually belonged to son at time of sale.
  5. Hahn1040

    199A for a dependent???

    exactly! We all know that this college kid is seriously in the business of coaching: Head coach: do you want to coach these little kids... I'll give you 50 buck college kid: OK (do I have to get up before 11 am to do it?) and certainly it is a SSTB: endorsements, personal appearances all of that
  6. I take this back. The amount of wages properly allocable to QBI is the amount taken into account under Regs. Sec. 1.199A-3 (Reg. Sec. 1.199A-2(b)(4) . So if only 30% of your wages are used to determine QBI, you would show 30% of the W-3 amount.

    Agricultural Program Payments

    Marie is correct, CRP payments are included on F but excluded on SE. Other ag payments not excluded from SE.
  8. W-2 wages: There is no over-inflation of wages, if all the wages are reported on Form W-2. and no employees are on a foreign payroll. You are following the method specified by the regulations. Unadjusted basis: If assets are being used both in the U.S. trade or business and the foreign trade or business, they are being used in the U.S. trade or business, so I think their cost would be included and not apportioned. Can the identification of assets be put on the client? If you are using ADS for assets used outside the U.S. you are overstating depreciation because GDS is required, and the method is straight-line over a longer life. As I read the 1120S instructions, the statement should be attached if there is more than one trade or business. I think it is referring to more than one qualified trade or business, so if you don't have that, a statement is not required. Of course, you can attach anything you want, but I'm just saying it's not required. The attachment to the K-1 is to help the shareholder, not inform the IRS.

    Contest - claiming dependent child who wins?

    I have won a similar situation on appeal by proving dependents spent the most nights with my client. Final document to appeal officer was 33 pages. If you get to that point I will gladly help you organize for appeal.
  10. Today

    199A for a dependent???

    Does this activity rise to the level of a trade or business under sect 162? Also advice the kid not to go over the threshold for SSTB exclusion!
  12. Nope, all crops lost during a hurricane.

    Farmer's Insurance Proceeds, QBI Qualified?

    So instead of reporting $1.5m as income from crops he is reporting as crop insurance income? Then why not? Was the payment for damages to trees or vines instead of the actual crops?
  14. per final reg: (xiv) Meaning of trade or business where the principal asset of such trade or business is the reputation or skill of one or more employees or owners. For purposes of section 199A(d)(2) and paragraph (b)(1)(xiii) of this section only, the term any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners means any trade or business that consists of any of the following (or any combination thereof): (A) A trade or business in which a person receives fees, compensation, or other income for endorsing products or services, (B) A trade or business in which a person licenses or receives fees, compensation, or other income for the use of an individual’s image, likeness, name, signature, voice, trademark, or any other symbols associated with the individual’s identity, (C) Receiving fees, compensation, or other income for appearing at an event or on radio, television, or another media format.
  15. Qualified business income must be effectively connected with a U.S. trade or business within the meaning of section 864(c) (Reg. Sec. 1.199A-3(b)(2)(A)). W-2 wages must be reported on a return filed with the Social Security Administration (Reg. Sec. 1.199A-2(b)(2)(iii)), so I would use the Form W-3 filed by the employer for the number. Unadjusted basis must be held by and used in the qualified trade or business (Reg. Sec. 1.199A-2(c)(1)(i)). How hard would it be to determine the cost of the assets used in the U.S. trade or business? If there are foreign fixed assets, I assume you would already be making the distinction by using ADS for depreciating foreign fixed assets and GDS for depreciating U.S. fixed assets.
  16. JohnH

    1099 Valuation Issues

    From the limited amount of background info given, I'm guessing either the individual did some things while an employee that were questionable, or else the former employer believes some questionable things were done even if there's no direct evidence. In any event, the former employer wants to use the 1099 as a way to retaliate. It's wrong on a number of levels, but that's the situation the client & tax preparer must deal with. The fact that the employer is tossing this back to the accountant, who is most likely trying to run interference, means it's unlikely they will amend the 1099. Even if they send a corrected copy to the client, there' no guarantee they will follow through with correcting the original filed with IRS, which is already in the system. SO there are plenty of ways for this to get sideways, beginning about 18 months from now when everybody's memory has faded. With $2,400 to $3,000 (at most) in taxes in play, it's an exercise in futility to get things corrected at the source. The path of least resistance is to handle it on the Schedule C with some brief documentation. Paper file it and hope it slowly makes its way through the system. BTW, I'd keep the explanation very simple and short. No sense writing an epistle explaining how and why you think the former employer is being a jerk. Just give enough information to increase the probability the problem will go away. That's what I would most likely do, ASSUMING I agreed to take on this shaky situation in the first place, which is not a given. My response would be quite different if the overstatement is $60,000.
  17. Logically, I'd agree. In theory, the crop insurance proceeds were awarded based on lost revenue. Revenue that would have been QBI qualified, so I don't see why the insurance proceeds wouldn't. But it's such a large number, if it were denied, it'd be a huge change to the return. And no where can I find a publication on this specifically. So if any farmer CPA out there how more insight, I'm all ears.
  18. Edsel

    8867 questions

    Documentation requirement is what crosses the line and makes us auditors rather than just due diligent preparers. Indeed if the IRS comes calling, they only need to ask for documentation and this serves as audit papers for the taxpayer. In all honesty, they couldn''t care less about tracking down a taxpayer - if they are in your office asking for documentation they are interested in a preparer penalty. Going across the tracks to find someone whose car is up on concrete blocks with broken glass in the street and screen windows torn is NOT why they came to your office.
  19. Great question, but I would think since the insurance proceeds should be taxable and reported on Sch F, the income would give rise to the QBI. Other thoughts??

    1099 Valuation Issues

    It's a waste of time to battle over 1099's. As JohnH suggested report the full amount and back out any excess.
  21. I'm going crazy trying to find an exact publication that I can reference down the road if need be. I have a clients that does construction both domestically and internationally and everything I'm reading says wage in connection with QBI income. I assume the property basis is the same but cannot find this specifically written anywhere. We used to file the DPAD so I feel the answer is somewhat similar and I can just use my same methods from previous years, but I'm just spinning in place trying to double-triple-quanta-quasi-check myself. Here are simple details: Total income is 2 million. Wages were $800k. Unadjusted Property is 100k. 35% was domestic income. So K-1 inputs would be: Code V: (2 mil x 35% domestic) 700k Code W: (800k x 35%) 280k Code X: (100k x 35%) 35k Sounds reasonable?
  22. Richcpaman

    DC Tax liability calculation is wrong

    Is it a rounding issue? What do you think the difference is? Rich
  23. GGRNY

    QBI & 179 deduction

    I reached out to ATX about this and their exact reply was "okay The amounts must be entered manually on the Activities tab of the worksheet. Automatic calculations are planned for the end of the month"
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